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I have 1,000,000 plus of 403b money. Currently invested 100% in stock mutual funds (mostly index) and want to protect 800,000 of it as much as I can. I am afraid of bonds, with all of the "bond bubble" talk going on. Should I put it in inflation protected T-bills? I want something really safe. Return is secondary.
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I don't mean to challenge you as I ask more from the standpoint of curiosity.... but how did you get $1MM into a 403(b)? Even if you maxed out every year's contributions for 30 years, that would amount to about $250K by my rough calculation using past year's max salary deferrals, and investments are restricted to, usually, crappy mutual funds and even crappier annuities. I've seen many many 403(b)s, and I've never seen one even close to $1MM...at least a 403(b) that hadn't gotten a rollover from another plan or IRA. As I say, just friendly curiosity, if you don't mind sharing :-)

But to your question of protecting $800K. You could use TIPS, but you'll get virtually no return at today's rates and you could lose value if there were a period of deflation...however unlikely. Another option are CDs, with the interest rate dependent on how long you can tie the money up...but you'd want to split it up between the CD sponsor's to get the full FDIC protection.

Keep in mind that if you wish to use these dollars for future income or future expenses, anything today with low interest/return rates mean you will be losing purchasing power. This sounds like it could be your greatest risk.

If you don't mind taking a few baby steps up the risk scale, you could invest in short duration bond funds offered by the likes of Vanguard.

And you don't say...but clearly you have taken investment risk to achieve a 403(b) this large, again, assuming no external rollovers into it. So why do you want to switch from what would seem to be considerable investment risk to essentially no investment risk?

BruceM
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If return is secondary, I might opt for simply putting it into an IRA CD. If you are ok with some risk and a bond bubble is your main concern, take a look at some of it in floating rate investments. They are designed to do better as rates go up, much like a floating rate mortgage goes up as rates go up. Not sure I would still term it "really safe" though.
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Actually the money belongs to my wife and I (separate accounts) and some of the money is in 401K/IRAs. I just on't like to type. We have done very well on our investments over the last 20 something years.
I am just getting paranoid about the market. I got paranoid a couple of times before and pulled them into T-bills just as things went south, so we have never suffered a big loss in the last 2 "downturns". I'm getting that feeling again...too much of a good thing type.
I will be 60 this year, and don't have time to catch up if I do badly.

Thanks for your advice.
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Isn't that what a balanced asset allocation is about? That seems a better approach than attempting to time the market, which is what you seem to be thinking about.

db
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